As mayor, John Tory could derail Toronto by trying to implement his half-baked, financially fraudulent transit plan.

Toronto's municipal election has been all about transit. Mayoral candidate John Tory, right, has has been pushing his SmartTrack plan, but John Barber says the city will have trouble paying its $3-billiion share of the costs without raising taxes.

By:John Barber Published on Sat Aug 30 2014

The worst thing about this municipal election campaign is that it’s all about Rob Ford. The second worst thing is that it’s all about transit — meaning that the price of escaping another four years of Ford could well be John Tory as mayor derailing the entire city by actually trying to implement his high-handed, half-baked, financially fraudulent SmartTrack gambit.

In either case, the credit for victory would be Ford’s. Only a city conditioned to believe anything — whose politicians are accordingly willing to say anything — could embrace a contraption like SmartTrack as uncritically as Toronto appears to be doing.

Olivia Chow misfired badly with a sensible transit policy broadly in line with the recommendations of TTC officials: more buses, better service. But Tory has learned the lesson of Fordism well — and SmartTrack is the result.

Before he felt a need to win election at any cost — ours, ultimately — Tory was as sensible as Chow, emphasizing in one pre-campaign speech that “transit plans without money are almost worse than no transit plans at all, because they create nothing but false hopes.”

Accordingly, he entered the race with sensible ideas about transit. But he only took flight once he ditched that policy and cynically embraced the power of false hope.

We’ll overlook the usual 66 per cent shortfall in Tory’s one-page, large-print funding plan for his $9-billion SmartTrack: there would be no transit plans at all if municipal leaders were unable to assume significant support from senior governments. What reeks is Tory’s presumption that Toronto can pay its $3-billion share of the costs without raising taxes — without actually paying anything, in effect. With SmartTrack, it’s all aboard for a free ride.

The magic carpet Tory has commandeered for this trip is called tax-increment financing (TIF), whereby the city borrows $3-billion and promises to pay it off with future tax revenue generated by property development attracted to the new stations. Tory’s breezy backgrounder cites a study by Metrolinx, the provincial transit authority, to explain how the magic is supposed to work. But because the type is so big and the single page so small, it doesn’t have space to report the study’s conclusion: that TIF is the riskiest, least desirable of all potential transit financing mechanisms, given one star out of five in the study’s final rating.

Never mind that. Tory’s one-pager does have room to assert that TIF “has been successfully used in recent years on subway projects,” making special mention of New York, “where recent subway extension was funded from TIF-backed municipal bond sales.”

That anodyne statement will never qualify as the biggest lie in Toronto today, not with Rob and Doug Ford still at the helm, but it could well prove the most consequential. The easily attainable facts about New York’s Hudson Yards improvement, which includes the new subway line, is that TIF is failing badly to pay off the project’s $3-billion debt. The “success” that Tory promotes is in fact a financial boondoggle for which New York taxpayers — despite Toryesque promises to the contrary — are paying heavily.

The facts are laid out clearly in a 2013 report from the New York Independent Budget Office, which shows that tax revenues generated by the project have fallen far short of expectations, forcing city taxpayers to pay an ever-greater share of the interest on its debt. Told that New York’s TIF-financed $3-billion investment would cost them nothing, taxpayers have so far paid almost $300-million on the ongoing bailout. The city’s budget analysts expect such voluntary “interest support payments” to continue rising for the foreseeable future. The debt is still $3-billion.

And this ain’t Scarborough! Developers have announced plans for almost 12 million square feet of new buildings in Hudson Yards — more office space than has appeared in downtown Toronto since 1989 — and it still won’t generate enough revenue to square the books, according to the IBO analysis.

Only in Rob Ford’s Toronto could an allegedly serious candidate describe such a quagmire as “successful” — and only in some Fordian la-la land would people believe it.

There is no point addressing all the other problems Tory’s hastily conceived scheme glosses over. To call SmartTrack a back-of-the-napkin improvisation is to insult the good name of cheap pulp. The finances say it all. And the real issue is how much Torontonians are willing to pay — both in uncontrolled debt service costs and in other important projects derailed by SmartTrack debt — to satisfy the short-term ambition of one more “say anything” politician.

John Barber is a freelance journalist.

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